Valdai Club

Trust and good faith continue to be at issue especially in EU-Russia, US-China, and Middle East relations. The world navigates multiple transitions at various levels. Expecting too much too soon invites allegations of diminishing returns on the above listed achievements and the creation of roadblocks. These amplify risks rather than resolve imbalances and grievances.

The International Energy Forum brings together the members of the Organisation of the Petroleum Exporting Countries, the International Energy Agency, the United Nations Security Council, including China and Russia that are not members of either OPEC or IEA, and other countries in Africa, Latin America, Asia and Oceania, including major economies such as South Africa, India, and Australia.

The establishment of the Forum marks the turning point from narrow to broad framing of global energy security relations.

After the energy market disruptions and global economic instability of the 70s and 80s, producer and consuming countries made a collective effort to move beyond the zero-sum foreign economic and security considerations that shaped collaboration on energy security throughout most of the 20^th century. This allowed consumers and producers to reap the benefit of ever more interdependent economic relations, and avoid, or better respond to future market disruptions and economic crisis.

The key levers consumers deployed through the International Energy Agency; the semi-autonomous energy watchdog of the Organisation for Economic Cooperation and Development, include the:

• Collective management of strategic reserves for short-term disruptions,

• Long-term cooperation on energy policy and technology, and

• Global cooperation and work with non-members towards association.

On the producer side, the Organisation of Petroleum Exporting Countries works to stabilize oil markets through:

• Policy coordination, including concerted deployment of spare capacity in response to short-term disruptions,

• Collective efforts to keep market volatility within an acceptable price band, and

• Global outreach as the 2016 Declaration of Cooperation to accelerate the stabilization of the global oil market through production adjustments illustrates in which Russia participates.

These separate mechanisms have proven their value overtime. By reframing these consumer-producer interest more broadly, and allowing these mechanisms to work in tandem they can do more for energy market stability and the global economy to meet the challenges of the 21^st century. The first meeting of the producer-consumer dialogue took place in 1991 after the end of the first Gulf War and the emergence of the Newly Independent States. These momentous events enabled:

1. Multilateral governance: Economic transition in Russia and other Newly Independent States accelerated inclusion of major economies into the global market economic system and adoption of multilateral frameworks such as the European Energy Charter and the World Trade Organisation.

2. Closer more broadly framed cooperation: Dialogue rather than legally binding agreements between producers and consumers on energy market security and data transparency to empower stable and equitable economic growth.

3. Wider acceptance of universal values and norms: Upheld by the United Nations, Council of Europe, the Organisation for Security and Cooperation in Europe, and others of course.

4. New agreements on global environmental and health standards: These involve closely monitored criteria and goals for sustainable development, climate change mitigation, and human well-being such as the UN 2015 Paris Agreement, and 2030 Agenda for Sustainable Development, the World Health Organisation’s Air Quality Guidelines, and the International Maritime Organisation’s Fuels Standards provide.

With these advances made over the past decades, the IEF provides the platform for separate capabilities to work together in a broader multilateral framework through energy dialogue, cooperation, and market transparency. This strengthens collective energy security and facilitates orderly energy sector transformations to the benefit of all.

In the age of change and the promise of transition sanctions on one party are, ultimately, sanctions on all. Dialogue has never been more important now that pathways and perceptions vary more widely. The world economy still depends on a reliable and transparent functioning of energy markets including unhindered trade and investment in energy resources and technologies. Beyond the phenomenal rise of renewables, it will continue to rely on hydrocarbons, and other technologies such as nuclear in which Russia plays a vital role. A broadly framed, technology neutral and data-driven dialogue makes for better informed policy and investments decisions, including for the provision of modern and affordable energy services to empower inclusive growth and meet the challenges of the 21^st century at an acceptable cost to societies.

However, in the current decade the gains governments and industry stakeholders envisioned appear less evident due to major geopolitical upheavals and resulting tensions. The rise of sanctions and restrictive measures are a response to these and integral part of the international rule of law and the state practice from which it evolves. The underlying considerations that motivate them are plain and clear to see for everyone, even when there is disagreement on their use and effectiveness to change behavior or make misbehaving prohibitively costly.

Trust and good faith continue to be at issue especially in EU-Russia, US-China, and Middle East relations. The world navigates multiple transitions at various levels. Expecting too much too soon invites allegations of diminishing returns on the above listed achievements and the creation of roadblocks. These amplify risks rather than resolve imbalances and grievances.

Issues must be addressed satisfactorily for broader dialogue and multilateral cooperation to move forward more productively. Managing expectations through transparent dialogue on facts and visions can give deeper insight, enrich options and, as the IEF producer-consumer dialogue shows, serve to rebuild confidence and regain momentum to overcome 20^th-century legacies over longer time horizons. Here Russia and the European Union must lead by example together with other Newly Independent states.

If energy market stability is to remain assured by the goodwill producers and consumers have built over the past decades, and a global economic slow-down is to be avoided, then energy trade, investment, and innovation must flourish in wider Europe and beyond to serve the well-being and advancement of both present and future generations. These demand that greenhouse gas emissions are left within acceptable thresholds, and sustainable development goals are achieved within the next decade.